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Default of failed LP
Requirments for GP
2 or more carrying on as co-owners for profit
When is partnership liable for k's
If partner entered into k for business
When is partnership bound by torts committed by partner?
if within scope of partnership
When is partnership not bound by contracts entered into by partner
no authority
What is incoming GP's liabilities for pre-exisitng debts?
NONE but any contribution money they put into GP can be used to pay off pre existing debts
Withdrawing partner's liability for partnership debts?
Still liable unless does 1 of 2 things:
1) Gives notice of withdrawal to creditors, or 2) 90 days after filing notice of withdrawal with the state
Describe the doctrine of partnership by estoppel? 3 elements
1. Person who is not a partner and has no partnership
2. represents to a 3rd person that a partnership exists
3. Will be liable as if a general partnership exists
How to form LP
i. Need at least 1 General Partner and at least 1 limited parter to form
ii. Must file limited partnership certificate with state
Liability of GP in LP?
personal unlimited liability
What rights do GP's have that LP's do not have
right to exercise substantial control and run day to day business of partnership
Does GO have FD to partnership>?
yes cannot do anything adverse to it
Liability of LP in LP
no personal liability just liable to amt put in
When will LP be liable personally
when exercises too much control
3 rights of LP's
1. bring derivative action
2. Vote on extraordinary matter of partnership
3. Get partnership information from GP or see documents upon reasonable demand (inspect and copy partnrship business)
Can LP ever assign his LP interest to another?
YES but only rights of distribiton, can only assign other rights if all partners consent or partnership k allows
Are GP's fidcuciaries?
Yes to other GP"s and to partnership
5 FD of GP's
1. duty of loyalty
2. duty of disclosure
3. duty to follow reasonable directions of partnership
4. duty of care
5. duty to provide complete and accurate information concenring the partnership
Can specific partnership assetS ever be transferred by GP?
Is goodwill an asset?
What is partner's profits considered to be
personal property can do whatever they want with it
If no agreement to management share what result?
EQUALLY disregard profits agreement
If k silent can partners ever get salary?
NEVER unless provided for in partnership agreement or compensation for winding up
Absent agreement how are profits shared?
Absent agreement how are losses shared?
3 stages of ending partnership
1) dissolution
2) winding up of partnership
3) termination
When partnership has dissolution what must happen
WIND UP and liquidate
How does GP dissolute from At will partnership
Any express manifestation starts dissolution and NO LIABILITY
Expressed partnership formed by contract how do start dissolution? 2 ways
1) by event specified in k
2) upon majority vote of remaining partners to dissolve within 90 days of a partner's withdrawal
When no dissolution but just withdrawal of GP
GP withdraws but majority of GP's do not vote to withdrawal within 90 days after GP's withdrawal
Liabilities for withdrawing GP?
1 any debt that arouse while he was GP and 2. If GP does dissolute then is liable for winding up business
How to cause dissolution in LP?
Withdrawal of a GP, unless all partners agree in writing to the appointment of any necessary GP's within 90 days of the w/d. So if new GP substituted for w/d GP then no dissolution.
When there is dissilotuin what must happen
WInd up by liquidating all assets of partnership and then paying off all creditors and then remainder to partners if any
WHat happens after winding up over?
TERMINATION nothing left
Do partners who engage in actual winding up/liquidating get compensation
yes even if k does not provide for
Partner's liability regarding old business during winding up?
partnership and partners liable on all transaction entered into to wind up old business with existing creditors
Partner's liability during winding up phase regarding new business
Liable in brand new business until either 1_ notice of dissolution given to creditors or 2) it has been 90 days after filing of dissolution with state
Priority of distribution?
1st level=Outside trade creditors, and inside partner creditors (when partner borrows $)
2nd level=Capital contributions by partners (not loans)
3rd level=If leftover $ then shared equally in absence of agreement
*if 1st or 2nd level not paid out then go after partners personally to get paid

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